Q: How will my Medicare prescription drug costs change in 2017, compared with 2016?
A: The Part D prescription drug deductible is a maximum of $360 in 2016, and that will increase to $400 in 2017. Some plans have deductibles well under these amounts, but no plans can have deductibles that exceed $400 in 2017. After you pay your deductible, you pay copays (a fixed amount) or coinsurance (a percentage of the cost) for your medications until the total you and the plan have spent hits the lower threshold of the donut hole.
Due to changes adopted in the federal Affordable Care Act, Medicare’s Part D prescription drug coverage gap (i.e., the “donut hole”) is gradually closing. In 2016, the coverage gap starts when an individual and the drug plan they’re enrolled in have spent a total of $3,310 on medications. For 2017, the coverage gap will start when total spending has reached $3,700.
Prior to 2010, Medicare Part D beneficiaries were on the hook for the full cost of their prescriptions while in the donut hole. But thanks to the Affordable Care Act, the percentage of drug costs that the patient pays while in the donut hole has been steadily declining over the last several years. In 2016, seniors only pay 45 percent of the cost of their brand name drugs (58 percent for generics) while in the donut hole.
In 2017, enrollees’ cost for prescription drugs will decrease again, to 40 percent for brand name drugs, and 51 percent for generics.
Once you and your drug plan have spent $4,850 in out-of-pocket drug costs for 2016, you leave the donut hole and become eligible for catastrophic coverage. At that point you will pay a small co-insurance payment for covered drugs for the remainder of the year. In 2017, the upper cap on the donut hole will increase slightly, to $4,950.
All of these numbers are the minimum allowable standards for coverage on Part D plans. So for example, a drug plan can have a deductible of less than $400 in 2017, but the deductible cannot exceed that amount.